Draft final report released on fracing in Australia’s Northern Territory

The draft final scientific report on the impact of hydraulic fracturing in unconventional shale reservoirs in Australia’s Northern Territory, released for public viewing last week, has reached an overall conclusion that the challenges and risks associated with any onshore shale gas industry in the NT are manageable as long as a number of regulations and standards are implemented and strictly enforced.

The draft final scientific report on the impact of hydraulic fracturing in unconventional shale reservoirs in Australia’s Northern Territory, released for public viewing last week, has reached an overall conclusion that the challenges and risks associated with any onshore shale gas industry in the NT are manageable as long as a number of regulations and standards are implemented and strictly enforced.

The mammoth 446-page report is the result of a yearlong enquiry by a panel of 10 eminent scientists with skills in various related disciplines and chaired by Justice Rachel Pepper, a judge of the Land and Environment Court of New South Wales. The inquiry was established in December 2016 following a moratorium imposed on fracing in the NT by the territory government in mid-September 2016.

In its deliberations the panel commissioned several scientific studies and sought input from a wide cross-section of the NT community. Topics covered included water, land, greenhouse gas emissions, public health, Aboriginal people and their culture, social impacts, economic impacts, and regulatory reform.

Managing risks

The draft final report acknowledged that no industry is completely without risk. Nevertheless, after considering data from a wide range of sources and noting recent and continuing technological improvements in the extraction of onshore shale gas, the panel concluded that risks can be managed by ensuring a range of measures are put in place. These include:

• Releasing land that is environmentally, socially, and culturally appropriate for use for shale gas development.

• The completion of a strategic regional environmental and baseline assessment (SREBA) to gather essential baseline data prior to any onshore shale gas industry being developed.

• Implementing an area or regional-based approval system.

• Mandating world leading engineering standards for the construction, maintenance, and decommissioning of all onshore shale gas wells and for the extraction of shale gas by fracing.

• Implementing new technologies where relevant as soon as they become available.

• Requiring the comprehensive monitoring and reporting of all aspects of onshore shale gas operations with real-time public scrutiny of the resulting data.

• Ensuring that the regulator is independent insofar as the agency that is responsible for promoting any onshore shale gas resource is not the same agency responsible for its regulation.

• Reforming the current regulatory framework governing onshore shale gas development in the NT to strengthen transparency and accountability of all decision-making and to ensure a stringent system of compliance and enforcement.

• Introducing full-fee recovery to fund the necessary regulatory reforms and to ensure that strong oversight is maintained.

The draft final report focusses largely on the Beetaloo sub-basin as this is the most likely area for any possible shale gas development in the NT in the foreseeable future (5-10 years) if the moratorium is lifted by the government. Key topics addressed during the inquiry were groundwater (including water quality), potential for spillage and the paucity of baseline data.

Regarding groundwater

Regarding groundwater, the panel concluded that there is insufficient information to permit a full assessment of the risks to groundwater resources from any shale gas industry established in the Beetaloo sub-basin. With that in mind, the panel recommended that a SREBA be undertaken to provide more detailed information on the groundwater resources before any approvals are granted for shale gas production. In addition, the panel recommended that:

• Sustainable extraction limits should be set on the basis of the outputs from a regional numerical groundwater model developed as part of the SREBA.

• The Daly-Roper Water Control District be extended south to include all the Beetaloo sub-basin.

• A separate WAP be developed for the northern and southern regions of the Beetaloo sub-basin.

The panel also recommended that:

• The proposed new water allocation plan for the Beetaloo sub-basin include provisions that adequately control both the rate and volume of water extraction by gas companies.

• Gas companies be required to monitor drawdown in local water supply bores.

• Gas companies be required to ‘make good’ any problems if this drawdown is found to be excessive.

The panel felt that the impact on groundwater used for drinking or stock watering from the occurrence of methane is low because methane in water is nontoxic. But the presence of methane above a threshold value of 10-28 mg/l. could result in an explosion risk under certain circumstances. Therefore the panel recommended that:

• A minimum offset distance of 1 km be established between water supply bores and well pads, although this distance may need to be changed subject to improved information on the hydraulic potential for transport of contaminants and the likely drawdown areas from any groundwater extraction.

• Real-time groundwater monitoring of groundwater quality occur around each well pad, particularly during fracing.

Looking at the potential for spills, the panel recommended that a wastewater spills containment and management plan should be prepared by the gas companies for each well pad using a rigorous set of world leading practice guidelines, and that these waste management plans be approved and enforced by the regulator. Further recommendations are that:

• Enclosed tanks should be used to hold wastewater in preference to open ponds.

• The well pad site should be treated, such as using a geomembrane, to prevent the infiltration of wastewater spills into underlying soil.

• A real-time groundwater monitoring program be established around each well pad, particularly during fracing.

Lack of data

The panel did see a significant problem concerning the lack of baseline data in the region and called for further studies over 2-3 years into environmental issues such as the impact on human health, ecosystems, and groundwater. These assessments should be carried out prior to any production approvals being granted, although exploration and appraisal work might be permitted sooner.

The report ended on what industry players regard as a positive note when it stated that, provided the recommendations are adopted and implemented, the panel felt that not only should the risk of harm be minimized to an acceptable level but, in some instances, it could be avoided altogether.

The draft scientific report will now undergo one further round of consultation in January 2018 before the final report is published in March 2018.

It remains to be seen how the NT government reacts to the detail of the report and its recommendations. A decision on whether to lift the moratorium could well be political rather than a scientific.

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